Why Did India’s PMI Ease Slightly in September Despite Strong Economic Momentum?
India’s economic expansion continued in September 2025, although at a slightly slower pace, as per the latest HSBC/S&P Global PMI data. The Composite PMI stood at 61, down from 63.2 in August, while the Services PMI eased to 60.9 from 62.9. Despite the moderation, both readings remain firmly in the expansion zone, highlighting the sustained momentum across manufacturing and services.
About the PMI Survey
The Purchasing Managers’ Index (PMI) is a composite indicator derived from monthly surveys of private sector companies. It reflects changes in output, new orders, employment, and business expectations. A score above 50 indicates expansion, while below 50 reflects contraction. India’s PMI has remained above 50 for over two years, signaling consistent post-pandemic recovery driven by robust domestic demand.
September Data Highlights
In September 2025, growth in new orders and employment persisted but at a reduced pace. The manufacturing segment saw slightly slower inflows, while service providers noted stable domestic demand but weaker overseas inquiries. The overall index of 61 still signals one of the strongest expansions globally.
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Services Remain the Growth Engine
India’s Services PMI at 60.9 underscores the resilience of consumer spending, tourism, and IT services, though global demand softening has capped export orders. Business confidence remains strong, supported by festive spending and public sector capex.
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Manufacturing Steady but Margins Under Watch
Manufacturers reported steady output growth, though cost pressures persisted due to energy and logistics costs. Input inflation remained moderate, suggesting that India’s pricing environment continues to support profitability despite global uncertainties.
Global Context and Outlook
Globally, composite PMIs in major economies like the U.S. and Eurozone show divergent trends — while the U.S. continues to expand, Europe remains weak. India’s PMI leadership highlights relative economic strength and strong domestic consumption, providing a buffer against global volatility.
Investor Takeaway
India’s PMI cooling marginally does not signal a slowdown but a healthy normalization after several months of elevated activity. Continued job creation, strong domestic orders, and upbeat sentiment bode well for sustained growth through Q4 FY2025. Macro indicators like PMI remain crucial barometers for gauging market resilience and potential rotation opportunities.
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SEBI Disclaimer: The information provided in this post is for informational purposes only and should not be construed as investment advice. Readers must perform their own due diligence and consult a registered investment advisor before making any investment decisions. The views expressed are general in nature and may not suit individual investment objectives or financial situations.
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